In today’s briefing:
- The Hump and Kink in Brazil’s Yield Curve to Become More Pronounced
The Hump and Kink in Brazil’s Yield Curve to Become More Pronounced
- With the Brazilian central bank approaching the end of its aggressive monetary tightening cycle, the rate curve has taken a unique shape that features a hump and a kink.
- The hump should get more pronounced because the rate-cutting cycle should be deeper than currently priced because real rates are quite elevated and growth risks are high.
- The kink should also get more prominent as the curve should steepen further out due to fiscal risks irrespective of who wins the upcoming presidential election.
Before it’s here, it’s on Smartkarma
